Ethereum co-founder Vitalik Buterin tweeted a defense of the network’s transition to proof of stake (PoS) on Tuesday, responding to arguments suggesting assets secured by such consensus mechanisms are a security.
See related article: Ethereum one step closer to Eth2 with Ropsten testnet merger
Fast facts
- “The fact that you can vote on something to change its properties is proof that it’s a security,” Swan Bitcoin managing editor Nick Payton said on Tuesday, signing “love Bitcoin” as a nod to the proof-of-work (PoW) consensus mechanism.
- Buterin dismissed this claim as an “unmitigated bare-faced lie,” adding PoS does not include voting on protocol parameters, nor does PoW.
- Ethereum is scheduled to ditch its current PoW consensus mechanism in August by merging the PoS Beacon Chain with the existing chain as a significant part of the long-running transition to Ethereum 2.0.
- Both PoS and PoW are methods for how networks are validated; in PoW, the probability of mining a new block is determined by how much computational power is done by the miner, whereas PoS rewards miners according to how much they have staked to the network.
- Regulators have been accelerating into the crypto space since the Terra-LUNA crash, with U.S. lawmakers proposing a bill that places significant emphasis on the classification of cryptocurrencies as commodities or securities.
- U.S. Securities and Exchange Commission (SEC) chair Gary Gensler — who has been pushing for classification of most cryptocurrencies as securities — recently doubled down on his statement that classifies Bitcoin as a commodity.
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